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London leads Europe in FinTech funding

Written by Hannah McGrath

09/01/2018

London led the way for tech investment and startup IPOs yet again in 2018, attracting £1.8 billion in venture capital (VC) – almost double the amount raised by second placed Berlin, according to an annual survey of Europe’s FinTech and startup scene.

Data compiled by PitchBook for London & Partner showed that the UK capital attracted 72 per cent of the total £2.49 billion raised by British tech firms in the last 12 months, with London’s £1.8 billion figure down from the record £2.53 billion raised in 2017.

London’s dominance was led by challenger banks, including Revolut’s £179 million mega round in April, Monzo’s £105 million closed in November and the £77.5 million poured into Oaknorth in September.

In the ranking of cities by venture capital raised, London secured the top spot for the fiftth year running, ahead of the £936.53 million raised by Berlin and the £797.04 million funnelled into Paris’ FinTech scene.

Stockholm came in at fourth place with £222.23 million, ahead of Barcelona’s £182.74 million.

The UK’s financial hub also landed 17 initial public offerings (IPOs) at a total value of £1.3 billion, with exits including a £300 million float for peer-to-peer lending platform Funding Circle.

The figures also showed the rapid rise of Big Data, artificial intelligence (AI) and blockchain startups as a major draw for investors.

UK AI companies peaked at £736 million investment last year, up 47 per cent on the £499 million raised the previous year, boosted by a £58.86 million round for Culture Trip, an AI-driven content company, and a £153 million raise for Graphcore, an AI chipmaker.

Funding into businesses developing cryptocurrency and blockchain technologies also saw record growth in 2018, with UK firms receiving over £200 million in VC funding, compared with the amounts raised in 2017 (£19.11 million) and 2016 (£51.96 million).

Major deals included a £61 million later stage funding round for blockchain software firm Bitfury, and a £12 million Series A round for London-based Trade.

Eileen Burbidge, partner at Passion Capital, said: “London is a hotspot for innovation and recognised as a leading centre in Europe for cutting edge technology development.

“This presents enormous opportunity for international investors, and today’s data suggests that London’s tech sector has a very bright future.”

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